How long to pay off $40,000 student loan?
The average amount of student loan debt held by Gen Xers is slightly more than $40,000, and the median amount is $25,000. The research also finds that Gen Xers with student loan debt have lower net worths and are more likely to fall short of their retirement savings targets, at least in part due to student loan debt.
| Debt | Monthly Payment | Payoff Time |
|---|---|---|
| $40,000 | $424 | 10 years |
| $40,000 | $461 | 9 years |
| $40,000 | $565 | 7 years |
| $40,000 | $755 | 5 years |
The average amount of student loan debt held by Gen Xers is slightly more than $40,000, and the median amount is $25,000. The research also finds that Gen Xers with student loan debt have lower net worths and are more likely to fall short of their retirement savings targets, at least in part due to student loan debt.
| Loan Balance | Interest Rate | Time For Repayment |
|---|---|---|
| $50,000 | 4.99% | 10 years |
| $60,000 | 7.5% | 20 years |
| $10,000 | 5.5% | 15 years |
| $35,000 | 6% | 15 years |
Plan out your repayment
Let's assume you owe $30,000, and your blended average interest rate is 6%. If you pay $333 a month, you'll be done in 10 years. But you can do better than that. According to our student loan calculator, you'd need to pay $913 per month to put those loans out of your life in three years.
| Loan duration | Average monthly payments ($40,000 loan) | |
|---|---|---|
| Poor credit | Good credit | |
| 1–12 months | $5,576.40 | $3,477.36 |
| 13–24 months | $1,849.82 | $1,832.22 |
| 25–36 months | $1,314.99 | $1,266.19 |
- Pay more than the minimum payment.
- Get on a budget.
- Cut back your spending.
- Increase your income.
- Refinance your loans (only if it makes sense).
- Avoid income-driven repayment plans (IDRs).
- Don't bank on student loan forgiveness.
- Make paying off your student loans a priority.
| State | Average student loan debt |
|---|---|
| California | $37,211 |
| South Carolina | $36,981 |
| North Carolina | $36,885 |
| Delaware | $36,776 |
Higher education expert Mark Kantrowitz recently explained this good rule of thumb in an interview with CNBC News: “If your total student loan debt at graduation is less than your annual starting salary, you should be able to repay your loans in 10 years or less,” he said.
Key Takeaways. Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.
Are student loans forgiven after 20 years?
Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones. ED will continue to discharge loans as borrowers reach the required number of months for forgiveness.
The average student borrower takes 20 years to pay off their student loan debt. Some professional graduates take over 45 years to repay student loans. 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
On average, it takes about 10–20 years to pay off a student loan. But with the right strategy, you can pay off your loans way faster! (I'm about to blow your mind.) Exactly how long it will take you to pay off your student loans depends on your original loan balance, your repayment plan and how much you pay each month.
Plus, the high amount of debt compared to a lower salary can produce a skewed debt-to-income ratio, which can hurt your credit. Unaffordable student loan debt can lead to delinquency and even default, which can ruin your credit score and prevent you from getting approved for other types of credit.
- Determine Your Payment Budget. ...
- Look At Alternate Repayment Plans. ...
- Consider Refinancing or Consolidation. ...
- Research Forgiveness Options. ...
- Find an Employer That Will Help. ...
- Try Debt Avalanche or Snowball Methods.
If you take a loan for five years and your interest rate is 4%, your monthly payment for a $40,000 loan will be $737. Remember that the longer the loan period, the more money you will overpay to the bank.
- Make bi-weekly payments. Instead of making monthly payments toward your loan, submit half-payments every two weeks. ...
- Round up your monthly payments. ...
- Make one extra payment each year. ...
- Refinance. ...
- Boost your income and put all extra money toward the loan.
| Lender | Loan Range | Credit Score Required |
|---|---|---|
| SoFi | $5,000 - $100,000 | 680 |
| Marcus by Goldman Sachs | $3,500 - $40,000 | 660 |
| Prosper | $2,000 - $50,000 | 640 |
| Wells Fargo | $3,000 - $100,000 | 660 |
Paying a little extra each month can reduce the interest you pay and reduce your total cost of your loan over time. Continue to make monthly payments even if you've satisfied future payments, and you'll pay off your loan faster.
Can you negotiate student loan payoff?
Yes, you can negotiate a settlement with your lender or servicer. However, if you are submitting a compromise for federal student loan debt, the Department of Education might need to approve it.
Data Summary. The average federal student loan payment is about $302 for bachelor's and $208 for associate degree-completers. The average monthly repayment for master's degree-holders is about $688.
The average student loan debt borrowed for a four-year bachelor's degree was $30,500 in 2019-2020, according to the National Center for Education Statistics (NCES). The average federal student loan debt has more than doubled since 2007, from $18,233 in 2007 to $37,090 at the end of 2023.
Many factors can play a role in how long it takes to get out of student loan debt, including the length of your repayment plan, your loan amount, interest rates, and your income.
However, our opinions are our own. See how we rate products and services to help you make smart decisions with your money. The average debt in America is $104,215 across mortgages, auto loans, student loans, and credit cards.
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